Key lawmakers flex new positions to bolster shipbuilding industry

Correction: A previous version of this story misstated the number of workers Ingalls employs. That number is approximately 11,000.

GULF COAST — On an overcast day in April, Ingalls Shipbuilding President Kari Wilkinson hopped off a large gray van to show off the Pascagoula, Mississippi, shipyard. Wilkinson oversees the largest shipbuilder on the Gulf Coast, and during this tour hosted a special set of guests: Senate staffers.

The 800-acre yard employs more than 11,000 workers and provides most of the Navy’s surface combatants. The staffers had come to see some of those programs, like the Arleigh Burke-class destroyer and the San Antonio-class amphibious transport dock.

It was part of a Gulf Coast tour of sorts.

A staff delegation also visited the smaller Bollinger Shipyards business in Pascagoula, where the company will construct the Coast Guard’s next polar security cutter.

Later that same week, the chairman of the House Readiness Subcommittee, Rep. Mike Waltz, R-Fla., traveled to see the Panama City, Florida, yard where Eastern Shipbuilding is constructing the Coast Guard’s next offshore patrol cutter. Though Eastern Shipbuilding is not in Waltz’s district, he met with the yard’s president before filming an interview with Fox News’ Sean Hannity and then flying back to Washington.

Another group of House staffers traveled to Mobile, Alabama, that week to call on Austal USA’s yard, which is preparing to construct modules for the Virginia- and Columbia-class submarines.

The flurry of trips shows Capitol Hill’s intensified attention to shipbuilding, with several lawmakers from the Gulf Coast and other shipbuilding states assuming key leadership positions on congressional defense committees. They have made clear they want to maximize ship production and repair lines, and some have proposed spending billions of dollars to upgrade shipyard infrastructure. They also want to expand the workforce and continue to approve multiyear, multi-ship procurement contracts.

And they’re now in position to help make that happen.

Those lawmakers include Waltz, as well as Mississippi Sen. Roger Wicker, who became the top Republican on the Senate Armed Services Committee in January, and Alabama Rep. Mike Rogers, who assumed leadership of the House Armed Services Committee after Republicans won control of the lower chamber last year.

At the same time, Rep. Trent Kelly, R-Miss., became chairman of the House sea power subcommittee.

“The turnover is going to benefit the Navy because you now have leadership in place on the House and Senate side that are from shipbuilding states,” Bryan Clark, naval expert at the Hudson Institute think tank, told Defense News.

Outside the Gulf states, other lawmakers with shipbuilding interests also have significant influence. Sen. Tim Kaine, D-Va., for instance, assumed the same role as Kelly in the Senate. Virginia is home to the massive Newport News Shipbuilding, owned by HII, the same parent company as Ingalls.

Meanwhile, Democratic Sen. Jack Reed of Rhode Island — another shipbuilding state — remains in control of the Senate Armed Services Committee, while Rep. Adam Smith of Washington, home to one of the country’s four public shipyards in Puget Sound, serves as the top Democrat of the same committee in the lower chamber.

“There still is a consensus and a willingness in Congress to spend more for shipbuilding because they know that’s a long-term effort, and it’s the one that has atrophied the most dangerously,” said Brent Sadler, a naval warfare and technology expert at the Heritage Foundation think tank. ”Shipbuilding needs a lot of attention.”

If the Navy is to reach the statutory 355-ship fleet goal, the service will need to dramatically expand the shipbuilding-industrial base. Hiring new workers will be key. Meanwhile, China is expected to reach a 440-ship fleet by the end of the decade, according to a 2022 Pentagon report. The department has identified China as the “pacing challenge.”

In the best-case scenario, the U.S. Navy will meet its statutory 355-ship goal by 2042, according to the service’s most recent shipbuilding plan. On top of that, the document states the fleet target will only happen if there are no funding constraints and if the industrial base receives “significant additional investment not reflected in this plan.”

“It is time for the U.S. Congress to lead this nation in expanding the shipbuilding-industrial base,” Wicker said in a March speech outlining his priorities as the new Republican leader on the Senate Armed Services Committee.

‘Strong American shipyards’

Congress has so far made smaller, piecemeal efforts to grow the shipbuilding-industrial base. But some of the new Senate Armed Services Committee leaders from major shipbuilding states envision multibillion-dollar investments so the Navy can both expand and maintain its fleet.

“Strong American shipyards are indispensable to U.S. military might,” Wicker told Defense News in a statement. “Congress must invest in workforce development, yard capabilities and advanced equipment to build a formidable fleet capable of deterring China and projecting global power.”

Congress appropriated $380 million in fiscal 2023 and $215 million in fiscal 2021 to expand shipyard infrastructure for Arleigh Burke-class destroyer production, as well as $130 million in fiscal 2020 for the program’s supplier base.

Additionally, Congress has invested money to bolster the submarine-industrial base in the hopes the Navy can meet its goal of building two Virginia-class submarines and one Columbia-class submarine per year. The recent trilateral AUKUS agreement, under which the U.S. and the U.K. will help Australia develop a nuclear-powered submarine fleet, has drawn additional attention to this constrained industrial base.

Lawmakers set aside $541 million for submarine supplier development in the FY23 government funding bill and $207 million for workforce development initiatives. The Navy is seeking another $400 million in submarine supplier development in its FY24 budget. Australia has also pledged to invest an unspecified sum in the U.S. submarine-industrial base as part of AUKUS.

Wicker, who declined an interview request, took to the Senate floor in May to promote legislation he introduced in 2021 with Kaine. He argued it would “spark a renaissance of shipbuilding by offering a demand signal for a major maritime buildup.” The initial Shipyard Act would have pumped an additional $25 billion into infrastructure at yards with the aim of enhancing industrial capacity.

His original bill would have injected $21 billion into the Navy’s Shipyard Infrastructure Optimization Program with the goal of accelerating the modernization of the country’s four public yards in Virginia, Maine, Washington and Hawaii. It would have directed another $4 billion to private shipyards across the country: $2 billion for ship construction and $2 billion for repair yards.

All those funds would be administered via the Defense Production Act, which would make private shipyards like Ingalls and Newport News Shipbuilding eligible for money to upgrade infrastructure.

Wicker has not reintroduced the 2021 Shipyard Act, which would significantly increase the defense budget top line. The recent debt ceiling deal sets the FY24 defense top line at President Joe Biden’s proposed $886 billion — a $28 billion increase over this year.

Congress and the Pentagon must fund multiple other priorities with that plus-up, dimming prospects for injecting an additional $25 billion solely for the shipbuilding-industrial base.

Nevertheless, congressional shipbuilding advocates may still have maneuvering room to bolster shipbuilding capacity.

During his meeting with Eastern Shipbuilding President Joey D’Isernia, Waltz complained that the Biden administration’s FY24 budget only includes $20 million for the Small Shipyard Grant Program — meant to bolster smaller yards like Eastern — and said he’s working to increase that number to roughly $50 million.

However these lawmakers try to help shipyards, buy-in from congressional appropriators will be key.

Sen. Susan Collins of Maine, who became the top Republican on the Appropriations Committee in January, co-sponsored Wicker’s Shipyard Act in 2021. The chair of that panel, Democratic Sen. Patty Murray, represents Washington, home to one of the four public shipyards.

Workforce constraints

The Shipyard Act largely focused on infrastructure modernization, but naval advocates point to trouble recruiting and retaining enough workers as the industrial base’s biggest constraint.

“The Shipyard Act is going to have to evolve more to put more money into workforce development and recruiting regional talent, specifically in the Gulf Coast,” said Clark, the Hudson Institute analyst. “The bill needs to put more money on the private side toward establishing a pool of workers.”

At Bollinger’s Lockport facility in Louisiana, the company — in an effort to reduce commutes and help with retention — lets workers stay on a house barge on the bayou during weekdays.

While its Sentinel-class cutters are designed in Lockport, the family-run business often moves its 3,500 employees among its 14 facilities scattered throughout Louisiana and Mississippi, depending on the workload.

But the company needs more workers. Bollinger, which recently acquired a Pascagoula facility, expects to hire 500-1,000 additional employees within the next two years, excluding subcontractors.

“Engineers right now are tough [to find], and designers,” said Bollinger President Ben Bordelon. “I hate to say just the basic stuff, but shipbuilders, welders, electricians, painters; we have a need right now for a lot of different crafts.”

Austal USA — which employs about 3,000 people — recently expanded a 117,000-square-foot facility to begin its steel line after it won the contract to build the next several offshore patrol cutters. In April, Austal’s aluminum and steel production lines co-mingled in the building as workers constructed the Navy’s last littoral combat ship. A tangle of wires and askew ladders hung around a multistory aluminum module for that last ship, vaguely reminiscent of an M.C. Escher drawing.

Austal now needs to hire an additional 1,000 workers at its Mobile yard. These workers would staff a new facility constructing command-and-control modules for nuclear-powered submarines as a subcontractor for General Dynamics Electric Boat in Connecticut.

The shipyard received a $50 million Defense Production Act grant to construct the facility, which it matched with another $50 million from its own coffers.

“Ingalls hires on a scale far bigger than us,” said Larry Ryder, Austal’s vice president for business development and external affairs. “Bollinger is hiring. We’re hiring. So it’s a challenge, and we’ve got to think beyond just Mobile. We’ve got to think nationally on how do we draw people to the region.”

At a Senate Armed Services Committee hearing in April, Wicker said Congress, the Navy and industry must rethink workforce retention and recruiting. “Expanding our shipbuilding capacity will require generational investments combined with new approaches to growing the workforce,” he noted.

Clark said a future iteration of the Shipyard Act could establish a “regional clearinghouse” to recruit nationwide. This would provide job security for private sector shipyards, allowing employees to remain in the region even if they get laid off when a major program ends. It would also give competing yards a consistent pool of labor.

“Or you could also make funds or grants available to shipyards in the Gulf Coast region or elsewhere to recruit people nationwide and bring those workers to the region,” Clark added.

Rear Adm. Thomas Anderson — the Navy’s program executive officer for surface ships — projected at a May hearing that shipyards would need to hire 80,000-100,000 tradespeople over the next decade for the submarine-industrial base to meet construction goals. That number excludes the hires needed for surface vessels and repairs.

He also said shipyards need to offer robust housing, day care and health care options to attract workers.

Yards in the Gulf have highlighted other perks in the hopes of differentiating themselves. For example, Ingalls opened a Chick-fil-A at its shipyard, which it had to remove from Google Maps after would-be customers tried to drive past security and into the yard.

Austal uses a four-day work week with 10-hour daily shifts, allowing employees to take a three-day weekend or work overtime on Friday for extra cash.

Eastern, which employs about 1,600 people, offers relocation bonuses to draw craft workers throughout the country to the Florida panhandle.

“We’ve been very aggressive in our recruiting efforts nationwide,” D’Isernia, Eastern’s president, told Defense News.

“It’s well documented that the Navy does not have enough shipbuilding capacity to grow and maintain their fleet the way they need to,” he said, adding that smaller yards like Eastern could help the Navy expand its shipbuilding capacity. He hopes the business’ experience making Coast Guard vessels can help it win Navy contracts.

All the Gulf Coast yards try to bring new talent into the shipbuilding trade through apprenticeship programs, which are sometimes bolstered with federal grants. Most partner with local high schools and colleges to help establish a talent pipeline.

Ingalls, which hires thousands of people in a typical year, hosts a large, on-site school to train new employees at its Maritime Training Academy.

The academy allows trainees to begin working at Ingalls while learning hands-on shipbuilding skills, first in the classroom and then on actual modules in the yard. It used to train more than 1,000 students before the height of the COVID-19 pandemic, when that number sunk to 400. Ingalls hopes to increase that figure to 800 by the end of this year and then grow further next year.

Austal has a similar facility. And Eastern partners with high schools and vocational schools to train and prepare students for a future in shipbuilding.

‘Demand signal’

Congress has in the past forced the Biden administration to buy more ships while authorizing block buys and multiyear procurement. Lawmakers argue this gives shipyards the long-term certainty they need to hire and retain workers while ensuring supply chain stability at lower costs.

“We need to provide our industrial base with the stability they need to invest and retain a skilled workforce,” Rogers, the new House Armed Services chairman, told Defense News in a statement. “Tools like block buys and multiyear procurement will help provide the predictability necessary to boost our industrial base.”

The chair of the Aircraft Carrier Industrial Base Coalition, Lisa Papini, told Defense News in March at the organization’s annual lobby day that block buys and multiyear financing helped save money on aircraft carrier production at Virginia’s Newport News Shipbuilding.

“We bought material before inflation,” said Papini, speaking on behalf of aircraft carrier builders. “That’s allowed us to take about $4 billion out of the cost of carriers as opposed to buying them individually.”

Lawmakers also say authorizing additional ship procurements bolsters shipyard capacity, allowing the businesses to hire more workers and expand production lines.

Last year, Congress authorized procurement for 11 battle force ships, two more than the Biden administration wanted. This year, legislators appear poised to do it again. In its FY24 budget request, the Navy sought $32.8 billion to procure nine ships. This number immediately drew congressional criticism as insufficient.

For instance, Congress last year authorized procurement for three Arleigh Burke-class destroyers — produced at Ingalls and General Dynamics’ Bath Iron Works yard in Maine — despite strong opposition from the Biden administration, which wanted to buy two.

Pentagon Comptroller Mike McCord, speaking at a March conference, said the defense-industrial base is producing 1.5 destroyers annually and does not have the current capacity to build three per year.

Still, Sadler noted, when they “say we don’t have shipbuilding capacity, they’re talking about today.”

“But if you provide a demand signal with some predictability for the shipyards and you make it so that they actually have the capital to make the investments to grow — basically buy cranes milling gear, hiring more workers because they have orders on the books with money flowing — then you’ll grow your shipbuilding capacity,” Sadler said.

To that end, HII spokeswoman Kimberly Aguillard told Defense News that Ingalls and its “network of nearly 1,200 suppliers” will be able to “build three [destroyers] a year if that is what the Navy and our country need.”

Key lawmakers also are opposing the Pentagon’s effort to stop another program line at Ingalls, citing concerns about future demand signals.

Wicker and Kaine are some of the most vocal opponents on Capitol Hill of the Pentagon’s attempt to pause production on amphibious ship procurement despite objections from the Marine Corps. The service asked for $1.7 billion in its unfunded priority list to finish buying the LPD-33, the next San Antonio-class ship in the line, which is manufactured at Ingalls.

The Pentagon has questioned the 31-ship fleet requirement for amphibious vessels. It’s conducting a study to determine whether to continue buying them and what capabilities they’d have.

Kaine declined an interview with Defense News, but told reporters in March the Pentagon’s pause “sends an extremely confusing message” to HII and could disrupt the supply chain and the workforce. Rogers, who also declined an interview, criticized the Biden administration for potentially letting the amphibious fleet fall below 31 ships.

Losing a program can at best mean retraining skilled workers like welders on a new production line, or at worst lead to layoffs. Austal, for instance, narrowly avoided laying off nearly 1,000 workers after the littoral combat ship line ended.

“If we want to maintain our advantage over China, we need to take shipbuilding seriously,” Rogers said. “I fully expect Congress to take the reins to ensure that the Navy and Marine Corps have the resources they need to counter China’s growing strength.”